topic Re: What are my odds of pre-approval this weekend? in Mortgage Loans

What are my odds of pre-approval this weekend?

Anonymous — Fri, 27 Mar 2015 18:32:13 GMT

Hello, everyone.

Just joined the site today. My fiance and I will be speaking with a loan officer this weekend and fingers crossed that we get approved.

Here are my pertinents:

1. Credit

Equifax - 608

Transunion - 601

Experian - 618

I've been paying off old collections that I had on my credit report.

Down to just two - an old credit card that I owe $720 on (paying $100 a month) and a medical bill from a couple of years ago that I mistakenly thought my insurance would take care of.

I always pay my car, current credit card, and college loan payments on time, though.

I don't have all three of my fiance's scores, but he signed up for Credit Karma last week and it was listed around 663 and 614.

2. Income

Gross is $31,990.

Fiance is paid under the table and makes around $16,000 a year or so.

3. Source of Income

Hourly, for both of us.

4. Monthly debt payments

$323 - car loan

$104 - college loan

$100 - credit card ($4,000 limit and I'm at around $3,900) - not using anymore and just paying bill each month

I don't believe he has any monthly bills

We are lucky enough to not have to pay rent (but living with folks)

I think I have low DTI?

5. Employment

Full time. I've been at my current job almost a year, but have been working for the government non-stop since Aug. 2009

Fiance has been working for parents (under table) for about 2 years

6. Assets/Reserves

Just started adding to retirement fund, so I believe there's about $1,300 in there so far.

I can borrow it as a loan, but I'd rather not.

Only $1,000 in savings between us both. Planning to save more if we aren't approved.

7. Location

Virginia

We'd like a place in Carolina County, VA, or Spotyslvania, VA.

8. Property

Single-family home

9. Value

Looking on websites, there are a lot we like from $99,000 to $160,000, so somewhere in there.

10. Occupancy

Primary Residence

11. Transaction type

Purchase

*** I do have another question: When an unmarried couple applies for a mortgage loan together, who's credit do they use?

Also, his pay is under the table and not documented, so can he even co-sign? ***

Re: What are my odds of pre-approval this weekend?

StartingOver10 — Fri, 27 Mar 2015 19:56:38 GMT

Your last two questions are excellent questions.

1) Yes an unmarried couple can purchase the home together. The lowest of the mid-score of the couple will be used. For FHA there is even a possibility of having a non-occupant co-borrower, usually a parent, on the loan if necessary.

2) No your fiance's income can not be used since he is paid under the table. All income has to be verified with tax returns, paystubs and Verifications of Employment. Since your finance is being paid under the table, I assume he has not been paying taxes on his income, right?

As to your DTI (debt to income) you would calculate your monthly debt payments plus the new housing payment to come up with your total debt ratio. To estimate your new housing payment you will need to estimate a purchase price achieveable in your desired neighborhood, the property taxes, homeowners insurance, mortgage insurance and HOA (if applicable).

Right now you are showing minimum payments of $527 which is approx 19.8% of your gross income of $31,990 without the new house payment. Have the LO figure out the maximum you can afford based on your income alone.

Note: You have another potential issue - you are not paying rent right now so you may bump into the "payment shock" problem. Again, discuss with your loan officer up front.

Re: What are my odds of pre-approval this weekend?

DallasLoanGuy — Fri, 27 Mar 2015 20:29:59 GMT

@Anonymous wrote:
Hello, everyone.
Just joined the site today. My fiance and I will be speaking with a loan officer this weekend and fingers crossed that we get approved.
Here are my pertinents:

1. Credit
Equifax - 608
Transunion - 601
Experian - 618

I've been paying off old collections that I had on my credit report.
Down to just two - an old credit card that I owe $720 on (paying $100 a month) and a medical bill from a couple of years ago that I mistakenly thought my insurance would take care of.
I always pay my car, current credit card, and college loan payments on time, though.

I don't have all three of my fiance's scores, but he signed up for Credit Karma last week and it was listed around 663 and 614.

2. Income
Gross is $31,990.
31900/12= $2665 per month
2665*.43=1146 <= amount allowed for piti + other debts
1146-323-104-100(other pmts) = $619 amount you can use for piti
Fiance is paid under the table and makes around $16,000 a year or so. not usable

3. Source of Income
Hourly, for both of us.

4. Monthly debt payments
$323 - car loan
$104 - college loan
$100 - credit card ($4,000 limit and I'm at around $3,900) - not using anymore and just paying bill each month
I don't believe he has any monthly bills
We are lucky enough to not have to pay rent (but living with folks)
I think I have low DTI?

5. Employment
Full time. I've been at my current job almost a year, but have been working for the government non-stop since Aug. 2009
Fiance has been working for parents (under table) for about 2 years

6. Assets/Reserves
Just started adding to retirement fund, so I believe there's about $1,300 in there so far.
I can borrow it as a loan, but I'd rather not.
Only $1,000 in savings between us both. Planning to save more if we aren't approved. i would like to see more since you live rent free

7. Location
Virginia
We'd like a place in Carolina County, VA, or Spotyslvania, VA.

8. Property
Single-family home

9. Value
Looking on websites, there are a lot we like from $99,000 to $160,000, so somewhere in there.

10. Occupancy
Primary Residence

11. Transaction type
Purchase

*** I do have another question: When an unmarried couple applies for a mortgage loan together, who's credit do they use? lowest mid score(same as married)
Also, his pay is under the table and not documented, so can he even co-sign? *** he can be on loan with no income

Re: What are my odds of pre-approval this weekend?

Lemmus — Sat, 28 Mar 2015 15:23:12 GMT

...there are good portions of Spotsylvania and Carolina counties that are USDA loan eligible ...your income would appear to make you eligible for a USDA Direct loan, certainly their USDA Guaranteed loan program ...in your shoes, I'd be looking at the USDA web site and find a USDA certified realtor/lender in that area ...your lack of down payment funds, much less closing costs is going to make any other mortgage difficult ...if otherwise eligible, USDA loans require zero down and you can roll closing costs into the loan up to the appraisal value ...the alternative is to have the seller pay your closing costs and USDA does not limit the seller contribution as other programs do.

...you will need to get your FICO 4 mortgage mid-score above 640 to be eligible for USDA ...and that is your mortgage score, not the FICO 8 score normally provided by myFico ,,,and certainly not the fako scores you find on most other sites.

...as Dallas noted, you should be putting money in your savings every month at least equivalent to what your PITI would be ...not only to be saving that money for closing costs but to be able to demonstrate to a lender the ability to actually pay a mortgage ...as it currently stands, you can't do that and that will weigh heavily against you.

...another aspect you may want to consider is the Virginia Down Payment Assistance Program which you are likely eligible for

...hth

Re: What are my odds of pre-approval this weekend?

frugalQ — Sun, 29 Mar 2015 16:32:01 GMT

If your BF doesn't have any income to include, you may want to reconsider putting him on the loan. Any debt he has will need to be included which will increase your DTI. If there are any credit issues on his part, they will also be scrutinized.

Calculate DTI with just you and calculate DTI with the both of you. Review his credit report and determine if there's anything on there that will cause issues from a loan underwriting perspective.

Good luck.